Swing trading method is based on long-term price fluctuations. These trading trends usually last from several weeks to several months for each position order. Whether investors choose to trade Swing trading or scalping trading will depend on the preferences and needs of each investor. To choose the right trading method, investors need to consider factors such as goals, knowledge, etc. Let’s learn about the Swing trading method with Crypto Trading right away!
Learn about swing trading methods in the market
Many investors when entering the market always wonder about How to make money from crypto through the swing trading method. Swing trading is a trading method in the medium-term time frame. The main goal is to hold long-term positions from several weeks to several months and achieve a lot of profit.
What is the basic concept of Swing trading?
Swing trading is known as a medium-term trading style. The goal is to hold positions for several weeks to several months. It helps investors seek higher profits in the long term. Unlike day trading and scalping, which rely solely on technical analysis. When swing trading, investors need to combine both technical and fundamental analysis to predict price trends.
Swing traders usually use H4 or D1 charts and only open orders when the probability of winning is high, 70% or more. They are suitable for any investor who can apply it to the Crypto market. Because of its flexibility, this trading is suitable for small individual traders. And also investors with medium or small capital.
What are the basic characteristics of Swing trading?
The first basic characteristic of swing trading is its infrequency. Swing trades are always executed at a lower frequency than day trading or scalping trading. Instead, swing traders focus on taking advantage of trading opportunities in the market over several days or weeks. One of the main goals of swing trading is to earn consistent profits. In many cases, swing traders seek profits of around 12% and reduce their risk to less than 3%.
Swing trading fees are usually lower than day trading or scalping trading. In addition, when trading Swing, investors do not need to monitor the market continuously. Because Swing trading orders often last from several days to several weeks. Investors can have more time to research and analyze the market in detail.
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What is the difference between the Swing trade and the Scalping trade?
Between Swing trading and Scalping trading, which How to trade crypto is more profitable? What is the difference between these two trading methods?
Compare the difference between Swing trading and Scalping trading
|
Swing trading |
Scalping trading |
|
| Time | Investors hold positions on weekly to monthly time frames. Only take profits when there are signs of the end of the wave. | Investors open orders during the day. And then close all orders without leaving them overnight. |
| Method | Investors use a combination of both technical and fundamental analysis tools when trading. | Most use indicators to predict price movements. Avoid trading during periods of strong news. |
| Use of leverage and derivatives | Limit the use of derivatives when Swing trading. Investors should only use leverage to enhance trading capabilities. | Take full advantage of leverage, margin and derivatives to enhance your potential returns |
| Investor skills | Requires investors to have basic knowledge and master technical analysis indicators. | Requires investors to have excellent experience and skills. In addition, the ability to manage finance and capital. |
| Risks of using this method | If trading with large capital and frequently. Investors are very likely to burn their accounts with Altcoins with large amplitudes. | Investors easily fall into the situation of chasing the top and not being able to exit the order in time. |
Swing trading method is suitable for which investors?
There is no rule that Swing trading should only be used for a certain target audience or group of people. However, based on the characteristics of this form, it can be suitable for certain groups of people. For investors with little capital but want to “make a lot of money”. And besides, if the investor does not want to be pressured by leverage, Swing trading is the optimal choice. Swing trading helps investors practice patience, and the ability to combine fundamental and technical analysis.
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Apply trading strategy with the swing trading method
Price data when trading Swing is extremely important in the market. Instead of using too many indicators such as Bollinger or candlestick patterns, Swing Trading focuses on promoting the potential of price data.
Swing trading with volume
Volume is an indicator that helps investors count the trading volume of any trading session. Price areas with large trading volumes will be shown through long volume bars. Volume helps investors know what price levels the majority agree on in the market.
These consensus prices are called Point Of Control. All Swing strategies combined with Volume can be traded in short-term time frames. However, if applied to small time frames. Sometimes the updated price data will not be complete.
Swing trading method combined with MACD indicator
MACD-H divergence has two forms, namely, upper divergence and lower divergence. The upper divergence of the market is a sign of a price decline. While the lower divergence of the market is a prediction of a price recovery. Different histogram bars are shown between the MACD line and the signal line.
They are arranged close together in groups for easy visualization. First, investors need to pay attention to the appearance of negative or positive history in the chart and then confirm the trend. Next, if the history shows signs of a trend reversal. This is a sign that resistance to the previous trend has begun to appear.
Conclude
The swing trading method is not difficult. This method is suitable for most investors in the Crypto market. However, to be able to use this method to trade. Investors need to have experience in both fundamental analysis and technical analysis. The swing trading method will help investors have safe and effective trading strategies. To better understand this trading method, don’t forget to follow Crypto Trading!
FAQs
Can Swing Trading Method Be Applied With Bollinger Indicator?
Investors can use all indicator tools when trading Swing including Bollinger Bands.
Is stop loss important when swing trading?
TP and SL are two important points for the Swing trading strategy. Investors absolutely must not ignore these two points when trading.
Is Swing Trading Susceptible to News?
Swing trading is affected by the news. However, because it is a medium-term trading strategy, it is not affected as much as Scalping trading.
